Question

6%/12%Your grandmother is giving you $100 a month for four years while you attend college to earn your bachelor's degree. At a 6.0 percent discount rate, what are these payments worth to you on the day you enter college

Answer 1

The answer is "
`0.39010989`"

Step-by-step explanation:

`PMT= 100\\\\n= 4 * 12 =48 \\\\r= (6.0)/(12)= 0.005`

PV =?

`PV= PMT* ((1-(1)/(1+r^n)))/(r)`

`=100 * ((1-(1)/(1+0.005^(48))))/(0.005)\\\\=100 * ((1-(1)/(1+3.55)))/(0.005)\\\\=100 * ((1-(1)/(4.55)))/(0.005)\\\\=100 * (((4.55 -1)/(4.55)))/(0.005)\\\\=100 * (((3.55)/(4.55)))/(0.005)\\\\=100 * 0.0039010989\\\\=0.39010989`